CAGE stands for: Cultural distance, administrative distance, geographic distance, and economic distance. You will research these environments as thoroughly as possible, to the extent that they are relevant to the business decision you are making.
The first section will be titled: Cultural Distance
In this segment of the environmental analysis, you consider the cultural characteristics of the countries that you are considering for expansion. The goal is to try to understand a) the extent to which effectively managing employees may be different from in the home country, and b) possible differences in consumer preferences. Please note that Hofstede dimensions are only useful for objective ‘a’, managing employees.
Checklist (including, but not necessarily limited to):
What is the cultural distance from the home country, of each of the countries under consideration for expansion (you can use Hofstede, GLOBE or Dow’s measures, as you see fit) What are the implications?
Is there a history of consumption of the type of products/services you are offering (think about the case we have covered)?
Are there language differences?
What is acceptable/unacceptable in advertising?
What are the customs in shopping for the type of product/service that your company offers.
How should marketing be adapted?
The next section will be titled: Industry Analysis
Requirements for this portion of the report include, but are not necessarily limited to:
1. Rivalry: i.e. Structure of the industry
Who are the main competitors in the country?
What are their relative market shares?
How much differentiation is there among competitors?
What is the industry concentration (Herfindahl, or market share of top 3/4 competitors, as available).
2. Buyers
How do customers generally purchase the products your company makes? I.e., directly from the manufacturer, a retailer, wholesaler or distributor?
What is the relative importance of online vs. in-store sales?
3. Suppliers
Who are the main suppliers in your industry (i.e. besides commodity suppliers).
Are these suppliers in the countries you are evaluating? Do they need to be?
4. New entrants
What is the current stage of the industry lifecycle?
Should your firm be concerned about other firms entering the countries you are evaluating, or existing firms modifying their strategies to compete more directly with your firm?
5. Substitutes.
Are there any clear alternatives to the type of product/service your firm offers? An example would be a new ride-sharing service vs. existing public transportation.
Here are some links: https://www.proquest.com/docview/2885376470?parentSessionId=RlsyO6vGjIhbvr6K8NWsCtvge8uFz%2FMycx%2F%2FzN9ewuc%3D&pq-origsite=primo&accountid=10361&sourcetype=Trade%20Journals
https://finance.yahoo.com/video/costco-planning-expand-u-overseas-154521250.html
https://www.hofstede-insights.com/country-comparison-tool https://www.globeproject.com/study_2004_2007?page_id=data
1. Examine Costco locations in high-urban density locations throughout the world. Compare and contrast the locations in terms of the adaptations made to better serve urban areas. What has worked and what has not? 2. Compare and contrast the CAGE distances of Canada from the USA. Make sure to consider regional differences (i.e. by province) that might impact Costco’s strategy. For example, product mix and shopping habits should be considered. 3. Compare and contrast three urban areas (e.g. Toronto, Vancouver, Montreal), examining both market size and shopping habits, to prioritize the opening of new urban Costco locations.
When writing the assignment, please write straight to the point (no fillers or fluff in the assignment). Please let me know if you hany questions or concers.
